International Organizations

With the number of founding members reaching 57, Asian Infrastructure Investment Bank (AIIB), is surely a diplomatic success for China. This is not the first bank initiated by the country. The development bank for Shanghai Cooperation Organization (SCO) groups China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan (with Azerbaijan and Armenia in talks to join) has been talk and has been in talks since 2009.

Taiwan has unsurprisingly been rejected as a founding member of the China-proposed Asian Infrastructure Investment Bank (AIIB). Standing outside the AIIB tent may not be a bad thing for Taiwan. It offers the Taiwanese government a chance to observe the still-opaque intents and terms of the AIIB and to buy time to address concerns about how and why Taiwan should join the Chinese initiative.

The dynamics at work in ASEAN are an under‐appreciated but crucial component of the Asia Pacific’s geo‐political equation. Understanding these dynamics offers insights for policymakers reviewing the United States’ rebalance to Asia.

With more than 600 million people, the ten-nation ASEAN is a major trading partner for Australia, China, the US, and beyond. ASEAN’s significance comes from its position astride strategic and economic choke points of vital concern to countries that rely on free and unfettered access for their security and prosperity.

The Asian Infrastructure Investment Bank (AIIB) has become part of Xi Jinping’s ‘Chinese Dream’ of national rejuvenation. The United States’ failure to block other developed economies from joining the AIIB seems to have brought this part of the ‘Chinese dream’ closer to its realisation. But it is way too early to celebrate. A bigger AIIB does not necessarily mean a better one. Beijing must prepare to play an institutional game with other members inside the AIIB.

America's poor response to the Asian Infrastructure Investment Bank has underscored the importance of the Trans-Pacific Partnership trade negotiations. A failure would risk hollowing out one of President Obama's major strategic foreign policy initiatives--the pivot to Asia. A critical piece for both negotiations and Congressional approval is the granting of trade-promotion authority (aka fast-track), which allows for an up-down vote on the final agreement.

The Asian Infrastructure Investment Bank (AIIB) is a far more economically efficient option than the Trans-Pacific Partnership (TPP) for integrating Asian economies to each other and to the rest of the world. While the United States is attempting to thwart China’s AIIB by completing the TPP, it is likely to result in net costs to countries other than the US.

Accusations against Cambodia made following the controversial 2012 ASEAN Foreign Ministers’ Meeting in Phnom Penh fail to acknowledge the challenges that each member state faces with the rise of China.